Jerry Jones Has a Visa Card with the Very Big

question 34

Multiple Choice

Jerry Jones has a Visa card with the Very Big Interstate Bank. He notices that the interest rate charged on this card is 19.5% per annum. Jerry has been employed by the same company for 15 years and has excellent credit. The company has a credit union that will issue Jerry a Visa card with an interest rate of 14.6%. The credit union offered Jerry this reduced rate because

• A) the systematic risk is lower for credit union members than it is for the general population.
• B) the unsystematic risk is lower for credit union members than it is for the general population.
• C) the credit union manager likes Jerry.
• D) all Visa credit cards charge the same rate.

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